Interesting cost information for persimmon builds

[Moonshine]

Just came across this document.

 

https://democracy.hambleton.gov.uk/documents/s18762/Item 3 - 19-01530-REM North Northallerton Persimmon.pdf

 

This has some rather interesting numbers in it relating to persimmon costings, from my reading;

 

2020 build costs - £99.42 per sq.ft

Net sales prices (based on the actual sales at a development) - £227.57 per sq.ft

 

The build cost seems to include land and services etc not just the build cost of the actual houses.

[Ralph]

There was a Guardian article last year that was talking about £66,000 profit on each house. That's net so after all the overheads of running a company etc.

Spending an average of £31k per plot and £112k on the build. 

 

 

 

[Thedreamer]

Crazy, some poor first time buyer having to carry that 'profit' as debt for the rest of their lives.

 

 

[jamieled]

The build cost including land seems remarkably cheap. Unless my sums are wrong they can build for ~£1000/sqm including the land?

[nod]

Most of the builders quote Sell two Third one profit 

While the big players get the land at a fraction of what we do There overheads are high 

Most on here should beat the above profits if they choose to sell 

[Mr Punter]

The way these appraisal normally work is to take the Gross Development Value and deduct construction costs, fees, overheads and profit to arrive at residual land value.

 

The developer will seek to demonstrate that there is not enough profit in the scheme to provide affordable housing or other S106 contributions.

 

The build cost of £1,000/m would be just that - excluding "technical abnormals" which I see accounts for a fairly chunky £30 million, or £41,000 per unit.  The land costs are also in addition.

[Moonshine]

1 hour ago, jamieled said:

The build cost including land seems remarkably cheap. Unless my sums are wrong they can build for ~£1000/sqm including the land?

 

That what is what i seemed to get from the document, though may not be right.

 

There is another document from another persimmon site, which has much more information on site appraisals (Appendix B - E), i have not seen this sort of information break down before for a big site and the calculations involved.

 

https://www.wycombe.gov.uk/uploads/public/documents/Planning/New-local-plan/Local-plan-examination-2018/Matter-8-Woolf-Bond-for-Persimmon-Taylor-Wimpey-Wates-ID-0847-0951-1268.pdf

 

This has 2018 data of cost per sq ft of £113 - £131  (£1130 - 1310 per m2),  average is £117 per sq ft. This seems to be just the build costs, it rises to £254  per sq ft when externals and abnormal development costs, contingency and professional fees are factored in.

 

 

But also the gross profit margins (20% for private / 6% for affordable), £121 million for a site with 2,357 houses (gross profit of £51k per house).

 

So if you able to build a house including the plot value and everything for less than £2,032 (£2,540 less 20% profit) it seems you are doing better than the big developers (in 2018).

 

Edited December 3, 2020 by Moonshine

[Ferdinand]

3 hours ago, Moonshine said:

Just came across this document.

 

https://democracy.hambleton.gov.uk/documents/s18762/Item 3 - 19-01530-REM North Northallerton Persimmon.pdf

 

This has some rather interesting numbers in it relating to persimmon costings, from my reading;

 

2020 build costs - £99.42 per sq.ft

Net sales prices (based on the actual sales at a development) - £227.57 per sq.ft

 

The build cost seems to include land and services etc not just the build cost of the actual houses.

 

That seems to be at some mid stage re-evaluation point, and is a doc done for the Council by a Viability Modeller.

 

Suspect it does not include S106 or Land. 

[CC45]

Look at any one of the stock market listed builders - you can work out their average profit margin - its about 50k/house i.e. around 20%

[ash_scotland88]

9 hours ago, Thedreamer said:

Crazy, some poor first time buyer having to carry that 'profit' as debt for the rest of their lives.

 

 

Poor hungry me going into a cafe and having to pay their profits so I can eat!

[Thedreamer]

14 hours ago, ash_scotland88 said:

Poor hungry me going into a cafe and having to pay their profits so I can eat!

 

I don't think we can compare a cafe with a house purchase. 

 

Shared equity/help buy schemes are a con. They don't help people on the housing ladder, they help the rich get richer.

 

Every few months of so, you come across a BBC article about some young twenty year ago, saying how they saved £10,000 deposit to buy a 2 bedroom developer home and now have a massive mortgage. Young people read this propaganda and fall into the cycle.

 

If you are a young couple, both go to Uni £80,000 worth of debt, struggle to get decent graduate jobs, then buy a crappy over priced developer home with 10% or 5% mortgage and that is you sorted with a chain around your neck for the rest of your life.

 

 

 

 

 

 

Edited December 4, 2020 by Thedreamer

[ash_scotland88]

8 hours ago, Thedreamer said:

 

I don't think we can compare a cafe with a house purchase. 

 

Shared equity/help buy schemes are a con. They don't help people on the housing ladder, they help the rich get richer.

 

Every few months of so, you come across a BBC article about some young twenty year ago, saying how they saved £10,000 deposit to buy a 2 bedroom developer home and now have a massive mortgage. Young people read this propaganda and fall into the cycle.

 

If you are a young couple, both go to Uni £80,000 worth of debt, struggle to get decent graduate jobs, then buy a crappy over priced developer home with 10% or 5% mortgage and that is you sorted with a chain around your neck for the rest of your life.

 

 

 

 

 

 

Personally I blame my parents generation.

By luck they grew up where "daily" purchases were getting cheaper and house prices were getting higher, during their time they purchased happily in the middle, when these two graphs met on their way up and down.

They're now obsessed with getting the biggest profit from their house and investing any extra funds into BTL properties.

 

My original analogy was admittedly very much making it black and white. But to counter what you said young (maybe my age in recent terms, 32?) also can't read read and unserstand that PCP for cars have balloons payments to own the car then kick off the fuss about that.

 

 

[Gus Potter]

Hi all.

 

Does this rule of thumb still fit?

 

Take a green field plot, no contamination etc in a rural area with private drainage but with main services at the road side.

 

You are a first time self builder and go for the full Architect design, plus tender, contract administration and site supervision. Then you could save about 10% on the build cost (excluding the land) compared with an equivalent house you may find for sale at an Estate Agent excluding agency fees etc. This is dependant on you shopping about and finding the right design team for you.

 

You are a first time self builder and go for a basic design service, put a good bit of work and research into the job. You engage a main contractor, handle the contract stuff yourself and so on. Here you may look to save 20% on the build cost at the end of the day.

 

You are a pro with the self build habit.. plenty on this site to help out with advice.. here the savings can be substancial... but remember that some of the folk here have spent years learning how to do it.

 

Now once you have the hands on experience your are possibly looking at build three.. one is profit if all goes well...but you need to be a savvy plot buyer and so on.

 

Just as an aside for an average standard.. say TF simple self build the material cost is about 2/3 and the labour 1/3 excluding the plot and services etc.

 

However, while the above may disappoint some, bear in mind that if you go about it in the right way you will avoid the possibility of suffering from the numerous defects that many new homes built homes by big developers seem to suffer from. And thus, you can add an extra 10% saving for the grief and stress you avoid trying to get your "developer house" fixed. You also get a home that is bespoke to you.

 

I wonder where the defects (after care costs) appear in the big developer costings? or are they not significant?

 

Although the developers have the economy of scale it's not suited to one off plots, their overheads are different and so on.

 

 

 

 

 

 

 

 

 

[Thedreamer]

15 hours ago, ash_scotland88 said:

But to counter what you said young (maybe my age in recent terms, 32?) also can't read read and unserstand that PCP for cars have balloons payments to own the car then kick off the fuss about that.

 

 

 

That's another problem. A couple of newish cars are ridiculously expensive for a young couple. Often this is required now, as both parents are now encouraged to work and they need a car that will be safe for little ones going between childcare. 

The whole system is a mess and I would expect the huge burden for COVID 19 debt will fall on the young generation even though we would have been rarely affected by the pandemic. Perhaps somebody on here will know, but I would expect all the austerity savings since the recession in 2008 have probably been wiped out. 

 

Trouble is that most young folk can't create any political pressure, as their views typically change once they are out of university bubble. The major parties bend over backward to accommodate pensioners. The term pensioner when I was young a kid, I associated with the war veterans/blitz survivors, but now the vast majority have just had the good life, low property prices, good pension etc.

 

I'm 34 for the record. 

[SteamyTea]

4 minutes ago, Thedreamer said:

they need a car that will be safe for little ones going between childcare. 

Just about every car made in the last 20 years is very safe.  Selling safety was a cynical marketing ploy by the industry.

6 minutes ago, Thedreamer said:

Trouble is that most young folk can't create any political pressure,

Said this before, what they need to do is go into estate agents every weekend and ask what they have in their price bracket i.e. 3 times major wage.

That should help get the message across, and piss off estate agents, who are leeches.

[CC45]

low interest rates = asset bubble.  OK when you're on the ladder but now when you aren't.